On October 9, the House Energy and Commerce Committee launched an investigation into the U.S. Department of Agriculture’s $267 million loan to Open Range Communications, which filed for bankruptcy protection in early October.
Six bipartisan members of the committee sent a letter to Rural Utilities Service Administrator Jonathan Adelstein requesting the firm’s complete loan application and any documents related to the decision to approve it. The current balance of Open Range’s loan — the largest made to rural broadband providers between 2002 and 2008 — is $73.5 million.
The letter also notes refers to concerns from the Agriculture Department’s inspector general about the oversight of broadband loan programs in light of the fact that $340 million had been paid out despite “incomplete applications, loans that defaulted, and grant funds used for inappropriate purposes.” Read more
This morning rural WiMAX provider Open Range Communications announced on its website that it has filed for bankruptcy. According to media reports, Open Range laid off most of its employees yesterday morning and is now relying on a skeleton crew based out of its headquarters in Greenwood Village, Colo. Further, the company’s CEO Bill Beans resigned; the company’s CFO Chris Edwards appears to be leading the company now. Also according to media reports, Open Range will stop accepting new customers, however it will continue providing service to existing customers.
As the New Edge first reported back in 2009, Open Range obtained a $267-million loan from the U.S. Department of Agriculture’s Rural Development Utilities Program (from the traditional telecom program, not a stimulus loan) to deliver portable and eventually mobile voice and Internet services. The company also received another $100 million in private financing from an arm of J.P. Morgan Chase.
Open Range initially planned to offer WiMAX service to 546 communities across 17 states, serving six million people by 2014. However, Open Range now serves 140 markets spanning more than 12 states and 20,000 subscribers, according to the Denver Business Journal. Read more
LightSquared, the Harbinger Capital Partners-backed company that is in the process of building a wholesale, nationwide LTE network, announced last Friday that it will partner with rural wireless provider Open Range Communications. The two companies have entered into an Initial Network Agreement to create a rural 4G service.
The partnership is expected to include a licensing arrangement whereby Open Range will lease LightSquared’s L-band spectrum. This wholesale agreement will enable Open Range to sell LightSquared’s next-generation satellite capacity. The partnership also will include a 4G nationwide reciprocal roaming arrangement. The companies plan to collaborate on the design, build-out and operation of Open Range’s network as well as on product and service evolution.
It’s unclear if this is one of the new customers LightSquared alluded last month. Read more
Colorado-based Open Range Communications Inc. has selected Alvarion for the nation’s largest Rural Utilities Service (RUS) funded WiMAX deployment.
Open Range plans to begin offering wireless broadband service in the fourth quarter of this year using Alvarion’s WiMAX 802.16e BreezeMAX solution. As part of this contract, expected to be more than $100 million over a five-year implementation, Alvarion will provide radio access equipment, customer devices and systems integration. Read more